District Spending Is About to Get a Lot More Transparent. Are You Ready?

Why ESSA's new fiscal transparency requirement really matters

It's time for superintendents to tackle a challenging conversation about how they allocate their limited financial resources—and how those decisions align with the core values of public education. The Every Student Succeeds Act's fiscal transparency reporting requirement is a sleeper issue that will demand more of district leaders than just a change in how they communicate policy decisions with their communities. It will also prompt both school and district leaders to figure out how they manage productivity.

The idea of educational "productivity"—sometimes referred to as "performance-based investments" or "return on investment"—is not new. More than a decade ago, the credit rating agency Standard & Poor's tried to measure school productivity with their now-defunct SchoolMatters service. The U.S. Department of Education took a stab at it in 2011, under the previous administration, with productivity guidance. The Center for American Progress got in on the action with its Return on Educational Investment report in 2014. Meanwhile, several states are beginning to explore the intersection of finance and academic performance at the school level. The list of initiatives goes on, but they have not required school leaders to meaningfully change the ways they manage school spending relative to student outcomes.

"What does a productive school-investment model look like?"

ESSA's new reporting requirement, which kicks in for funds spent during the 2018-19 school year, will likely be different. (The first reports will be available in the 2019-2020 school year.) ESSA requires districts to publish per-pupil allocations for actual personnel and non-personnel expenditures by each funding source (federal, state, and local funds), for each district, and school on their annual report cards.

Reader, this is a big deal.

The federal government has never asked this of districts, and few superintendents have thought through the mechanics of the work at the school level. Hard questions are cascading across the country: What to do with shared school costs? What about centrally purchased items? Do existing charts of accounts adequately capture the information required by law? All of these are sticky questions that administrators must soon resolve.

In the short term, superintendents and principals will need to get on the same page about current district allocation policies and practices, why some schools appear to get more resources than others, and how this all aligns with the stated vision and mission of the district.

Consider, for example, a scenario where Elementary School A receives $250 more per pupil than Elementary School B down the road. Why is that happening? Perhaps School A serves more students with learning disabilities. If so, why is that the case? Perhaps High School C benefits from more state and local per-pupil revenue than a neighboring school because of an effort to better serve regional workforce technology campaigns. Is that a fair distribution of resources? If the allocations seem to contradict the district's stated objectives, what will be done to adjust the investment strategy?

The earlier that district leaders begin to pay attention to these matters, the less disruptive the new reporting and transparency will be for school and district staff faced with new questions from the public.

Over the long term, the new expenditure reporting requirements will push superintendents to be more strategic about managing productivity. This new transparency will make it easier for the public to investigate the relationship between academic and financial data. With a little effort, for example, a go-getting local reporter or parent can get a snapshot of a school’s status based on test scores, graduation rate, and more. With a bit more effort, she or he can connect those data to the new school quality and student success indicators and map those data over time. Inevitably, stakeholders will couple the academic information with the new expenditure information to investigate productivity. Over time, districts will have to field questions about not only school level allocations, but also the return on these investments, prompting district leaders to be more mindful of productivity.

At the same time, ESSA now asks superintendents to strengthen their investment strategies. The law's predecessor, the No Child Left Behind Act, encouraged disproportionate investment in supplemental math and reading programs, at the expense of all else. With ESSA, lawmakers have broadened the focus to allow school and district leaders to address the wide range of student academic needs. Some need social and emotional support. Others need personalized instructional support.

Tuesday, Aug. 28, 2018, 2 to 3 p.m. ETThe Every Student Succeeds Act requires states to give parents and the public a wealth of information on school quality and performance. But with a federal deadline looming, making these school report cards both complete and simple-to-use is no easy task. Join our guests for a deeper look at the solutions you may need to weather the ESSA implementation storm.
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In exchange for this wider range of allowable costs, state and district decisionmakers are expected to make smarter investments. When possible, these investments should now be evidence-based, effective, and continuously scrutinized internally during program implementation. In other words, the investment should be productive.

But what does a productive school-investment model look like? There isn't a single way to scour information to drive continuous improvement. Rather, each school leader will need to figure out what works for their community, and in so doing they will transform school management and communication practices.

But first things first. Beginning next year, superintendents and principals need to get ready to communicate what is going on with per-pupil expenditures for actual personnel and non-personnel costs by each funding source districtwide and for each school.

David A. DeSchryver is a director at the Washington-based Whiteboard Advisors, an education strategy firm. Noelle Ellerson Ng is the associate executive director for policy and advocacy at AASA—The School Superintendent's Association—which is located in Alexandria, Va.

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Vol. 38, Issue 02, Page 24

Published in Print: August 29, 2018, as How Districts Spend Is About to Be a Big Deal

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